("CIT Swings to 2Q Loss Amid Steep Debt-Related Costs," at 7:16 a.m. EDT, incorrectly stated that CIT hopes to move its vendor finance business platform to CIT Bank later this year. A correct version follows:)
CIT Group Inc.'s (CIT) swung to a second-quarter loss as the lender to small and mid-sized businesses struggled under heavy debt-related costs and a declining asset base.
"While our recent efforts to advance our liability restructuring initiatives further reduce our cost of capital and position CIT for long-term success and profitability, they negatively impacted our second-quarter results," said CIT Chief Executive John Thain.
This month, CIT transferred its vendor finance platform into CIT Bank, a move that will allow CIT to use its bank's deposits to fund vendor loans and help it reverse shrinkage of its asset base.
On Tuesday, CIT said total assets were $48.01 billion as of June 30, down from $55.45 billion a year earlier and $50.68 billion in the prior quarter.
CIT, which emerged from bankruptcy protection in December 2009 after struggles during the credit crisis, has recently seen its name floated as a potential acquisition target. In May, one of CIT's largest shareholders cited Wells Fargo & Co. (WFC) as just one of a handful of cash-flush banks that could show interest in the company.
CIT reported a loss of $48 million, or 24 cents a share, down from a year-earlier profit of $181.6 million, or 91 cents a share, a year earlier. The current period includes $163 million in debt-related costs, among other items.
Analysts polled by Thomson Reuters most recently forecast a per-share loss of 32 cents.
Total interest income slid 41% to $602.1 million. So-called "other" income fell 13% from the previous year to $657.8 million.
Credit-loss provisions fell to $85 million, down from $247 million a year earlier and $123 million a quarter earlier.
Shares of CIT closed Monday at $39.65 and were inactive in recent premarket trade. As of the close, the stock has fallen 16% in the past year.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; email@example.com